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Baidu.com, Inc. (ADR) (NASDAQ:BIDU), often referred to as the Google Inc (NASDAQ:GOOG) of China, has adopted new, low-power servers from Marvell Technology Group Ltd. (NASDAQ:MRVL). A large tech company adopting low-power servers isn’t typically news, but in this case it’s certainly news for the chip sector. Baidu’s new servers are built around ARM Holdings plc (ADR) (NASDAQ:ARMH) chip designs, a key shift in server design. ARM dominates the smartphone chip market, providing the designs found in the majority of mobile devices, and now has eyes on the server market.

Importantly, Baidu isn’t the only one interested in ARM-based servers. Both Amazon.com, Inc. (NASDAQ:AMZN) and Facebook Inc (NASDAQ:FB) have looked into it, though both appear to be waiting for the next generation of ARM designs. The major sticking point for the companies is the availability of 64-bit chip designs, while the current generation is just 32-bit. Currently the 32-bit chips don’t stand up to their memory demands the but future designs will. Baidu is using the servers for storage, which requires less power than other operations.

According to both Marvell and ARM this is the first commercial deployment of a server built around an ARM chip. This is a huge step for ARM-based designs and a major milestone in the server landscape.

Traditionally servers are built around chips from Advanced Micro Devices, Inc. (NYSE:AMD) and Intel Corporation (NASDAQ:INTC). Both must be weary of ARM designs reaching into their stronghold, particularly since its designs already dominate the mobile space. All is not lost though, primarily due to AMD and Intel’s lead on 64-bit designs. For its part, Intel has been pushing the power consumption of its chips lower and lower; it may be able to erase the big advantage of ARM-based servers.

AMD has taken a different approach, opting to build servers that make use of ARM-based devices along with their more traditional line. This is a telling move, signaling the changes hitting the market.

Server Manufacturers Are Already Experiencing a Shake Up

More than two years ago Facebook started initiative that hits OEMs where it hurts, designing their own servers rather than letting Hewlett-Packard Company (NYSE:HPQ) and Dell Inc. (NASDAQ:DELL) take the reins. The initiative and its guiding foundation, called Open Compute, is focused on building efficient computing infrastructure at the lowest cost. This Ars Technica article takes a technical look at Facebook’s motivations for leading its own server design for those interested. The largest benefits are in power savings, cost savings, and the ability to mix and match chip suppliers, which ultimately leads right back to cost savings.